The aim of this research project is to increase understanding of community hospitals by analyzing their history from the 1870s to the 1930s. It is suggested that the modern community hospital sector originated in these years partly in response to changing patterns of immigration, church affiliation, urban missionary work, and individual philanthropy. The objectives of community hospitals were shaped by the motives of various sponsoring groups as well as the economics of producing and marketing services for paying patients. Conflict between the social service and market objectives of private non-profit hospitals conditioned their response to escalating costs and helped shape the development of prepayment plans in the United States.